One loyal friend is worth ten thousand relatives

Claudia Georgiades, Associate Director at iris Concise explores the key components required to build a loyal customer base.

Loyalty, a buzz word in the marketing world ever since the success of the Tesco, Nectar and Boots cards, not to mention all of the airline loyalty programmes. The success of these programmes has meant that the word “loyalty” has become inextricably linked with “points collection”. But what is generally forgotten in all of this is that loyalty is actually the outcome, not the mechanic, and that points collection is only one possible mechanic which could be used on the road to achieving customer loyalty.

Let’s not forget the ultimate objective of building loyalty – to retain valuable customers in order to sell more products! But customers have become increasingly savvy about techniques to try to earn their devotion and so companies have to find new ways to offer a real value exchange to build long-term trust and loyalty.

In fact companies are learning that long-term trust and loyalty comes with enhancing experiences at all touch points along the purchase journey and building more of an emotional value exchange with customers. The mechanics for building trust have seen a paradigm shift in the last few years, with new technologies and social media leading the way for companies to build more interactive and engaging relationships – this comes with it’s own challenges of how to balance simply selling products with meeting customer needs and expectations.

Assuming a company has the product bit sorted, building customer loyalty can be distilled into four components:

  1. Make it easy - Ensure behaviour becomes a habit by providing a utility and seamless service.
  2. Incentivise and reward - Incentivise and reward valuable engagement and purchase behaviour.
  3. Be relevant - Use data and insight to personalise the customer experience.
  4. Engage - Create and curate engaging content experiences.

Firstly, and I believe most importantly, a company needs to find new and innovative ways to get more product into the hands of more customers in the easiest way possible. It’s about understanding the barriers to purchase and finding ways to break down those barriers so that it’s an easy, seamless and friction free experience.

Secondly, find interesting and engaging ways to incentivise and reward valuable customer behavior. Clearly, rewarding purchase is one of the top priorities, but with social media growing in importance, rewarding customer engagement is not only possible but critical. There are a number of ways in which this could be implemented, from explicit loyalty programmes through to implicit surprise and delight mechanics.

Thirdly, be relevant, targeted and most of all human! Capture data along key touch points of the customer journey, from simple engagement opportunities to sales, and use this insight to build a deeper customer relationship.

And finally, find innovative and exciting ways to engage with customers - create, curate and collaborate to give customers the most memorable experiences possible!

It’s important to ensure that all four components are not addressed in isolation and that all initiatives reflect the brand values and are integrated seamlessly across all customer touch points - blurring physical and digital to enhance the customer experience and build long term customer loyalty.

Nike, Burberry, Nespresso and KLM are just some companies that have understood what building customer loyalty entails. Transitioning from pure play category brands to being leaders and reference brands that exceed customer needs and expectations keeping customers coming back for more.

So lets forget about the mechanic as the driver of customer loyalty and focus on what is most important – enhancing the whole customer experience to create a real value exchange.